The mall-based retailer said on Thursday that it is holding off on closing its planned 138 under-performing stores until July 31. The liquidation process will begin on May 22 instead of April 17, as previously reported.
"Since announcing store closures, affected locations have seen better than expected sales and traffic, which is common when store closures are announced. Traffic typically increases in closing store locations for a variety of reasons, including curiosity, nostalgia and the lure of lower prices," a J.C. Penney spokesman told TheStreet via email. "Meanwhile, it's advantageous for the company to continue selling through spring and summer merchandise at current promotional levels by pushing liquidation back another month."
The store closures will represent 13% to 14% of J.C. Penney's current store base and less than 5% of annual sales.
But, the delay doesn't gloss over the fact that the retailer needs to slim down its bricks-and-mortar store base in this increasingly e-commerce-driven retail environment.
J.C. Penney had said same-store sales at the targeted locations were "significantly below" the remaining store base and operate at a much higher expense rate due to poor productivity. The company is expected to gain some $200 million in annual cost savings from the closings.